JGB mood breaks gloomy streak - Thomson Reuters survey

TOKYO, July 9 (Reuters) - Sentiment towards Japanesegovernment bonds improved after three straight weeks ofdeterioration, a Thomson Reuters survey published on Mondayshowed, in the wake of disappointing U.S. employment data andthe European Central Bank's interest rate cuts last week.

The poll's JGB bull-bear diffusion index, measuring thosewho believe yields will fall against those who expect them torise, remained in negative territory at minus 6.

But it rose off a reading of minus 61 in the previous surveytaken one week earlier, which was its lowest level since thesurvey began in June 2011.

The median forecast for the 10-year JGB yieldat the end of this week was 0.800 percent, down 0.05 basis pointfrom last week's forecast and flat from Friday's closing level.

The online survey of 102 JGB market participants from majorinstitutions was conducted from Friday afternoon until 8 a.m. onMonday (2300 GMT Sunday). The poll received 46 responses, for aresponse rate of 45.1 percent, including 20 responses from "realmoney" investors from institutions such as banks, pension andinvestment funds and insurance companies.

On Friday, the U.S. Labor Department reported thatemployers created only 80,000 jobs in June, far fewer thanneeded to bring down the 8.2 percent unemployment rate andadding to evidence that Europe's debt crisis was weighing onglobal growth.

The U.S. jobs data came a day after the ECB's move to cutits target interest rate to 0.75 percent from 1.0 percent andits deposit rate to zero from 0.25 percent.

The ECB's rate cut raised expectations that European fundswill flow out of that region. JGBs, with their perceived lowrisk, could benefit from these flows.

The 10-year yield was down half a basis point at 0.795percent in Monday morning trade, after earlier matching the June4 low of 0.790 percent, which was its lowest level since June2003.

The 10-year JGB futures contract for September wasup 0.08 point at 144.03 after hitting 144.09 earlier, itshighest level since October 2010.

(JGB market participants who are interested in participatingin future surveys can contactyoshiyasu.shida@thomsonreuters.com.)($1 = 79.511 Japanese yen)